2014 (4) TMI 416

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....se is a excisable commodity and was required to be cleared on payment of duty. Accordingly, proceedings were initiated against the appellants by issuance of three Show Cause Notices raising demands and proposing imposition of penalties, which Notices stand adjudicated against them and such orders stand upheld by the Commissioner (Appeals). The details of confirmation of duty and imposition of penalties are as under:- Sl. No.   Appeal No.   Period covered   Date of Show Cause Notice   Amount Demanded (Rs.) 1.   E/3763/2012   September, 2010 to April 2011   08.08.2011   Duty - Rs.26,135/- Along with interest and penalty - Rs.26,135/- 2.   E/2162/2012   February, 2009 to August, 2010   09.12.2010   Duty - Rs.1,73,115/- along with interest and penalty Rs.1,73,115/-   3.   E/2039/2011   2004-05 to 2007-08   29.04.2009   Duty - 1,58,816/- Duty Rs.1,58,816/- along with Interest (penalty set aside by Commissioner (Appeals)   3. We have heard both the sides duly represented by S....

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.... lower authorities and submits that in as much as the provisions of Rule 2(d) were amended with effect from May, 2008 by way of adding an explanation, the goods which are sold in the market are to be considered as excisable goods. As such, the appellants were required to discharge their duty liability in respect of sludge and pulper waste and residue. He also submitted that the sludge and pulper waste sold by the appellant are further being consumed by the buyers in the manufacture of paper and as such, has to be held as excisable goods. 8. We have considered the submissions made by both the sides and have carefully gone through the impugned orders. The issues involved in the present cases as to whether the sludge obtained in the effluent treatment plant situated in the appellants factory has to be held as excisable goods for discharging of excise duty or alternatively, if excisable, the same would be exempted in terms of Notification No.76/86-CE, dated 10.02.1986. The other issue required to be decided is as to whether the pulper waste, which emerges in the pulp plant of the appellant can be said to be a manufactured goods and consequently excisable. 9. The lower authoritie....

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....effect of an explanation to the main section, the Hon'ble Supreme Court in the case of Sulochana Amma Vs. Narayana Nair reported in 1995 (77) E.L.T. 785 (SC) observed as under:-               It is settled law that explanation to a section is not a substantive provision by itself. It is entitled to explain the meaning of the words contained in the section or clarify certain ambiguities or clear them up. It becomes a part and parcel of the enactment. Its meaning must depend upon its terms. Some time it would be added to include something within it or to exclude from the ambit of the main provision or condition or some words occurring in it. Therefore, the explanation normally should be so read as to harmonise with and to clear up any ambiguity in the same section.  In as much as the Section 2(d) of the Act defines the 'excisable goods' as the goods specified in the First Schedule and Second Schedule to the Central Excise Tariff Act, 1985, has been subject to duty of excise. As rightly contended by the appellants, the goods are first required to be specified in the First and Second Schedule of the Central Exc....

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....refuse, etc. if sold would become an excisable product, liable to pay duty. The said circular stands quashed by the Hon'ble High Court, Allahabad in the case of Balrampur Chini Mills Ltd. Vs. Union of India reported in 2013 (38) STT 635/30 Taxmamn.com 175 Allahabad. By referring to explanation added to Section 2 (d) of Central Excise Act, 1944, the Court observed that it only refers to the goods which is capable of being bought and sold which shall be deemed to be marketable. Earlier also, beggass was being bought and sold for a consideration and even after the amendment in 2008, it is being bought and sold for a consideration. Hence, it was marketable earlier also and no difference has been made about the marketability of beggass on account of addition of explanation to Section 2 (d) of Central Excise Act, 1944, in as much as it does not ceases to be waste and it does not become a manufactured final product for the purpose of Rule 6 of CENVAT Credit Rules, 2004. As such, by referring to the decision of the Hon'ble Supreme Court in the case of CCE Vs. Shakumbhari Sugar & allied Industries Ltd. reported in 2005 (189) E.L.T. 62 (SC) it is held that beggass obtained during the course ....